The sharp slumps in EUR/JPY and EUR/GBP late in the session suggest today’s price action is more about the euro than the dollar. The buck is being supported by expectations that the rebounding US economy will draw the Fed off the sidelines earlier than previously expected but the euro is being undermine by growing credit jitters across the European continent, from the Atlantic on the west to the Baltic Sea in the east.
USD/JPY was shoved lower by a wave of EUR/JPY sales that took the pair lower from 89.88 to 88.99. The cross slumped to 130.00 from 131.60 in early US trade.
In this environment, EUR/USD looks like the cleanest way to play the dollar rebound/ credit-concerned market.
